What is an Owner-Builder?

An Owner-Builder is a property owner who acts as his or her own general contractor for a home remodeling project and obtains his or her own building permit. Typically property owners obtain owner-builder permits when they are providing all or a portion of their own labor and/or materials personally. An owner-builder assumes responsibility for the overall job which may include, but is not limited to, taxes, insurance, and other legal liabilities.

What are some of the Owner-builders responsibilities?

The Contractors State License Board recommends that it's best to hire a licensed contractor who is legally qualified to do the work. However, if you hire unlicensed people to perform the work, you may be considered an employer. This could make you responsible for:

  • Registering with the State and Federal Government as an employer. 
  • Withholding State and Federal Income Taxes, Federal Social Security Taxes, paying Disability Insurance and making Employment Compensation contributions. 
  • Providing workers compensation insurance unless the work is done by members of your immediate family.

If you are an employer, you must register with the state and federal governments as an employer and be subject to the above responsibilities. There may be financial risks for you if you do not carry out these obligations and these risks are especially serious with respect to workers' compensation insurance.

For more specific information about your obligations under federal law, contact the Internal Revenue Service at (800) 829-1040 and the U.S. Small Business Administration at (800) 359-1833.

For more specific information about your obligations under state law, contact the Employment Development Department at (916)653-0707, the Department of Industrial Relations at (415) 703-5070, and the Franchise Tax Board at (800) 852-5711.

Owner Builders are also responsible for many items such as:

  • Supervising the job, including scheduling workers and obtaining building permits and requesting inspections. 
  • If any of the construction doesn't pass building inspections, the property owner is responsible for correcting the work and getting it re-inspected. 
  • Making sure all workers and material suppliers are paid, or face the possibility of mechanic's liens.

Designers and Consultants vs. Licensed Contractors

Owner-Builders many times hire unlicensed "designers" or "consultants" instead of licensed contractors to "save money" on their project. Owner-builders should be aware that many times these designers or consultants are either a contractor who has had his or her contractor's license suspended or revoked, is unqualified to be licensed, or doesn't meet the minimum requirements to get a contractor's license. The California State License Board recommends that unless the property owner is very experienced in construction, it is best to hire a legitimate, licensed expert. Please visit our Hiring a Contractor page for additional information regarding hiring licensed contractors.

How do I check if an architect, engineer, or contractor has an active and valid license through the State of California?

Please visit a link below to check licensing information for:

Where do I file a construction complaint?

All construction complaints should be filed through the State of California Contractors State License Board (CSLB) regardless whether the contractor is licensed or unlicensed.

Other Agency Resources

Questions? Contact the Building Division at (530).661-5820